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Maxwell Reports Third Quarter Results

The following excerpt is from the company's SEC filing.

Higher than expected revenue and reductions in operating expense drive non-GAAP EPS of

Restructuring efforts on track; enhancing cost discipline and realizing operational efficiencies across the organization

Note: A webcast of Maxwell's conference call will be available at 5:00 p.m. EDT today at

http://investors.maxwell.com

SAN DIEGO -

October 29, 2015

- Maxwell Technologies, Inc. (NASDAQ: MXWL) today reported operational and financial results for the three and nine months ended September 30, 2015. Total revenues for the third quarter of 2015 were

$45.1 million< br>
, an increase of

from the second quarter of 2015 and an increase of

from the prior year quarter. Ultracapacitor revenue increased to

$31.8 million

from the prior year quarter. The Company reported

$3.8 million

of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the third quarter of 2015, compared with

$711,000

in the second quarter of 2015 and

$1.6 million

for the prior year quarter. Net loss for the third quarter of 2015 was

$1.4 million

$9.4 million

$3.3 million

in the prior year quarter.

"During the third quarter, we made meaningful progress transitioning our business to higher growth opportunities and executing on our restructuring plan, which is already yielding positive results," said Dr. Franz Fink, Maxwell's president and chief executive officer. "We achieved better than expected revenue, primarily driven by upside demand in the China hybrid bus market. We expect this strength to continue into the fourth quarter. We do, however, expect the new China hybrid bus policy to put pressure on our top-line revenue early in 2016."

"As our business evolves and diversifies, our continued focus on costs and operational efficiencies should position us for sustainable profitability over the long term. Maxwell's opportunity is large and growing, with our current served available market of nearly $600 million expected to grow to more than $1.4 billion by 2020 and further beyond that. Our five-year plan for revenue growth will build upon a solid revenue base today to more mid- and long-term opportunities as we diversify further in auto, rail and grid energy storage. Looking ahead, we are excited about the significant prospects for our company, and we are confident that we are taking the right steps to grow our business and enhance shareholder returns," concluded Fink.

-more-

Financial Results and Operating Metrics

(Unaudited; in millions, except for per share amounts)

Three Months Ended

Nine Months Ended

September 30, 2014

45,076

37,796

41,593

117,542

133,668

31,801

23,449

28,809

77,194

94,719

High-Voltage revenue

10,275

11,892

10,428

32,818

30,514

Microelectronics revenue

Non-GAAP gross margin

Operating loss

(6,259

(2,282

(15,482

(1,569

Non-GAAP operating income (loss)

(2,158

(1,271

(8,858

(1,449

(9,376

(3,292

(20,166

(4,154

Non-GAAP net income (loss)

(3,190

(2,281

(11,457

(1,220

Non-GAAP net income (loss) per share

Basic and diluted

Net cash provided by operating activities

Cash purchases of property and equipment

Cash, cash equivalents and restricted cash

25,213

25,031

30,798

For a reconciliation of non-GAAP financial measures, please refer to the section entitled “Reconciliation of GAAP to Non-GAAP Financial Measures” included at the end of this release.

Discussion of Financial and Operational Results for the Quarter

Revenue and Non-GAAP Gross Margin

Total revenue for the third quarter of 2015 was

$37.8 million

in the second quarter of 2015, primarily due to increases in ultracapacitor and microelectronics revenue.

Ultracapacitor revenue for the third quarter of 2015 was

$23.4 million

in the second quarter of 2015, primarily driven by increased demand in the China hybrid bus market.

High-voltage revenue was

$10.3 million

$11.9 million

in the second quarter of 2015.

Microelectronic revenue for the third quarter of 2015 was

$3.0 million

$2.5 million

Non-GAAP gross margin in the third quarter of 2015 was

, a slight decrease when compared with the second quarter of 2015, reflecting increased demand in the ultracapacitor business.

Adjusted EBITDA & Operating Expense

Adjusted EBITDA for the third quarter of 2015 was

in the second quarter of 2015. The quarter-over-quarter increase was primarily driven by higher revenues due to increased demand for our ultracapacitor products and a reduction in our operating expenses as a result of our restructuring and cost reduction efforts.

Operating expense in the third quarter of 2015 was

$14.9 million

$18.4 million

in the second quarter of 2015, primarily driven by lower restructuring related charges and cost reduction efforts.

Non-GAAP operating expense for the third quarter of 2015 was

$13.5 million

and excludes adjustments for stock-based compensation, restructuring related and various other non-standard charges.

Third quarter 2015 operating loss was

$651,000

, compared with an operating loss of

$6.3 million

in the second quarter of 2015. The quarter-over-quarter reduction in operating loss was primarily driven by lower restructuring related charges, increased demand for our ultracapacitor products and reduction in our operating expenses as a result of our restructuring and cost reduction efforts.

Non-GAAP operating income for the third quarter of 2015 was

$1.0 million

$(0.05)

per share, compared with a net loss of

$(0.31)

per share, in the second quarter of 2015.

Non-GAAP net income for the third quarter of 2015 was

$234,000

Capital Expenditures

Capital expenditures during the third quarter of 2015 were

$562,000

$942,000

Business Outlook

Total revenue for the fourth quarter of 2015 is expected to be between $46 million and $50 million, a 6 percent increase at the midpoint of guidance.

Non-GAAP gross margin for the fourth quarter of 2015 is expected to be...


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